Traders sell fish to customers at Gikomba market in Nairobi on Thursday, July 08, 2021. [Collins Kweyu, Standard]
As I scanned through social media on New Year’s Eve, Kenyans expressed their expectations on the period ahead. The expectations showed this year will be tough for businesses.
And being in a pandemic year, that will also see us hold the General Election, expectations of the business community differ.
A peek into Kenya’s electoral cycle shows that business activity tends to decline during electioneering years.
Both local and foreign investments usually dip owing to political jitters. Kenyans usually spend less and as a result, businesses downsize expecting low demand for goods and services, which increases unemployment.
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The business community expects the political class to inspire confidence in the economy by shaming and castigating all forms of violence. A call of the business community in 2021 was the cost of doing business, particularly in the manufacturing sector.
Having faced the introduction of regressive taxes like the minimum tax (which thanks to the Judiciary was thrown out), adjustment of specific excise duty rates for inflation, and high fuel prices, businesses look forward to some breathing space this year.
We expect duplicate levies and cess by counties that have been a thorn in the flesh of businesses doing cross-country trade to be scrapped. Invisible costs such as harassment by county askaris, extortion by organised gangs, and even the police make doing business in Kenya costly.
In August 2021, the Ministry of Trade secured an order for 11 tonnes of local coffee from Korea and the business community looks forward to more similar initiatives to promote trade.
We expect the nominated US ambassador to Kenya Meg Whitman and US Trade Representative Katherine Tai to resume negotiations for the US–Kenya free trade pact that will replace the Africa Growth Opportunities Act (Agoa) once it expires in 2025.
Agoa accounts for over 70 per cent of Kenya’s exports to the US and employs over 52,000 Kenyans. Kenya should also be advertised as a destination for business process outsourcing (BPOs).
Philippines and India who have utilised BPOs to cut unemployment. Business leaders should seek elective seats to champion business-friendly policies.
-Dr Erick Rutto. The writer is the vice president, Kenya National Chamber of Commerce and Industry.
